Raffles Place serviced residence was sold at highest offer, Ascott Reit clarifies

ASCOTT Reit's manager said on Monday that the sale price of S$353.3 million for the recently divested Ascott Raffles Place reflects the highest offer received during its marketing exercise.

The building had been sold to private investor and developer Cheong Sim Lam on Jan 9.

An earlier valuation of the building at S$215 million as at Dec 31, 2018 by Colliers International was done with the discounted cashflow method, which is "consistently applied by Ascott Reit and generally in line with market practice". Ascott Reit's assets see recurring cashflow because they are held primarily to generate stable long-term rental income, it added.

This was in response to a letter published in the forum section of The Straits Times on Monday titled "Probe in big difference in valuation and buyout amount".

The writer said the 64.3 per cent difference between the valuation and eventual sale amount days later was "baffling", and claimed this was a "serious red flag that something is amiss in the process".

Ascott Reit's manager said that it "wishes to clarify that all divestments are carefully considered by the manager, and the divestment of Ascott Raffles Place Singapore was approved by the board of directors in accordance with the applicable legal and regulatory legal requirements".

Ascott Reit closed unchanged on Tuesday at S$1.150.